Karnataka High Court
Adarsh K Yalakapalli vs The Gulbarga Urban Development ... on 30 November, 2017
Author: G.Narendar
Bench: G. Narendar
1
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 27TH DAY OF OCTOBER, 2017
BEFORE
THE HON'BLE MR. JUSTICE G. NARENDAR
WRIT PETITION NO.203777/2016 (GM-RES)
BETWEEN:
Adarsh K. Yalakpalli
Aged about: 28 Years,
Occ: Private Service
R/o Kavya Nilaya, No.10-934/36
Mahalaxmi Nagar, Brahampur,
Dist. Kalaburagi
... Petitioner
(By Smt. Hema L. Kulkarni, Advocate)
AND:
1. The Gulbarga Urban Development
Authority
Represented by its Commissioner,
Kalaburagi-585 102
2. The President
Office of Gulbarga Urban Development
Authority
Kalaburagi-585 102.
(R-2 vide Order dated 25.10.2017 deleted)
... Respondents
(By Sri. Shivakumar R. Tengli, Advocate for R-1)
2
This writ petition is filed under Articles 226 and 227 of
the Constitution of India praying to issue writ of certiorari
quashing the impugned resolution dated 6.1.2016 as per
Annexure-E issued by the respondents only in respect of
petitioner and etc.
This petition coming on for preliminary hearing in 'B'
Group this day, the Court made the following:
ORDER
Heard the learned counsel for the petitioner and the learned counsel for the respondent No.1.
2. That the respondent issued a notification dated 21.9.2015, calling for application from the general public for the intended public auction of commercial sites opposite to Shanti Nagar, Near Bus Stand of various dimensions in Kalaburagi. Pursuant to the said notification, the petitioner also participated in the public auction, held on 19.10.2015 in respect of commercial sites, measuring 9 X 12 Sqmtrs. After making initial deposit of Rs.2,00,000/- and after being 3 declared as highest bidder, he further deposited 25% of the bid amount i.e., Rs.9,12,500/- vide D.D. dated 19.10.2015. The above facts are not in dispute. Later for various reasons, the Corporation resolved to cancel the auction sales. Being aggrieved by the same, the petitioner is before this Court.
3. The petitioner prays for issuance of writ of certiorari to quash the impugned resolution dated 6.1.2016 whereby it was resolved to cancel the public auction, held by the 1st respondent-Corporation and further prays for quashing the proceedings of the respondent by which the allotment order came to be cancelled and for such other reliefs.
4. After arguing at length the learned counsel for the petitioner and the respondent No.1 fairly submit that the issue is already decided by a Division Bench of this Court and the dispute has been settled by its order dated 3.3.2017 rendered in W.A.No.200557/2016 and 4 other connected matters whereby this Court after traversing the contentions has been pleased to hold that the cancellation of the proceedings of the 1st respondent-Corporation whereby it sought to cancel the sale of the sites could not be intervened within the light of the law laid down by the Hon'ble Apex Court in the case of Tata Cellular vs. Union of India reported in AIR 1996 SC 11. The Division Bench of this Court was pleased to observe as follows;
" 7. At this juncture it would be apt and appropriate to note the rules which govern the right, manner and mode in which decision can be undertaken by the authority namely Rule 7 and it reads as under:
"7. Decision of the Authority.- (1) The Authority shall have the right to confirm any sale in auction. The authority may cancel any such sale after recording reasons. And when the sale is cancelled, the amount received from the auction purchaser as deposit shall be refunded to him.
Provided that authority shall not cancel the sale where the auction proceeding is confirmed."
(Emphasis supplied by us) 5
8. A bare reading of above rule would indicate that the authority would have right to confirm any sale in auction and it also possesses the right to cancel such sale after "recording reasons"
as indicated in sub-rule (1). When such sale is cancelled, the amount that has been received from the auction purchaser is required to be refunded to the auction purchaser. Proviso to sub-rule (1) of Rule 7 would indicate that the authority shall not cancel the sale so conducted where it is confirmed. Thus, under sub-rule (1) of Rule 7 Authority has a right to confirm any sale in auction and it may also cancel such sale, and of course after assigning reasons. However, once sale is confirmed, Authority cannot cancel the auction sale. In the instant case, undisputedly the sale was not yet confirmed and as such proviso is not attracted. In exercise of the power vested in sub-rule(1) of Rule 7 the authority has cancelled the auction sale. As to whether the reasons assigned by the authority can be gone into by Courts is the question and said issue is no more res integra. The Courts will not go into the decision as such and it is the decision making process, if flawed, Constitutional courts would interfere in exercise of its power vested under Article 226 of the Constitution of India and set right the illegality that has been committed by the authorities by way of judicial review. For this proposition, judgment of the Hon'ble Apex Court in the case of Tata Cellular vs. Union of India reported in AIR 1996 SC 11 can be looked-up where under it has been held that the duty of the Court is to confine itself to the question of legality of the decision making process and held that Courts concern should be:
(i) Whether a decision-making
authority exceeded its powers?
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(ii) committed an error of law;
(iii) committed a breach of the rules of natural justice;
(iv) reached a decision which no
reasonable Tribunal would have
reached; or
(v) abused its powers.
9. Judicial review of administrative act is inherent in the constitutional courts to prevent arbitrariness or favoritism and ensuring exercise of the power in a justifiable manner. The judicial power of review is exercised to rein in such exercise of the power arbitrarily. It has been held by the Apex Court in Tata Ceullular's case that these restraints bear hallmarks of judicial control over administrative action and the judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision-making process itself.
10. The constitutional courts exercising the extra-ordinary jurisdiction under Article 226 would not sit as an appellate Court to examine the decision arrived at by the statutory authorities. The preliminary duty is to ascertain as to whether there is any infirmity in the decision making process. This view is also supported by the judgment of the Hon'ble Apex Court in the case of Sterling Computers Ltd.
vs. M/s. M & N Publications Ltd. and others reported in AIR 1996 SC 51.
711. Keeping these authoritative principles laid down by the Hon'ble Apex Court in mind, we have examined the decision of the appellant - Development Authority in its meeting held on 06.01.2017 to cancel the auction sale held on 19.10.2015 or its decision resolving not to confirm the auction held on 19.10.2015, whereunder development authority has cancelled the sale by assigning reasons as noticed herein above. As to whether said reasons would appeal to logic would not be the subject matter of judicial scrutiny or fall within the realm of scrutiny by Court exercising the jurisdiction under Article 226 of the Constitution of India. Sub-rule (1) of Rule 7 empowers the Urban Development Authority to cancel such auction sale by assigning reasons. If the reasons are not flimsy, not serving the public interest or said reasons would indirectly sub-serve the interest of some unknown hands, it is only in such circumstances the Constitutional Court would exercise its extra-ordinary jurisdiction to scuttle such attempts. As otherwise, the exercise of jurisdiction by the authority in not confirming the sale cannot be held as one without power. The merits of the decision arrived at by the Development Authority as analysed herein above cannot be gone into and it is only the manner and method adopted by the authority to arrive at such decision which can be gone into and same is found to be contrary to the rules, then only Constitutional Court can undertake exercise of its powers under Article 226 of Constitution of India to quash/set aside. At the cost of repetition, it requires to be observed by us that Development Authority in the interest of generating more income and also on account of lack of participation of larger number of persons in the auction held on 19.10.2015, it has resolved to re- auction the sites and by adopting said process it cannot be contended by the writ petitioners that their rights would be prejudiced. In fact, no right had vested in the petitioners by their mere participation in 8 the auction and as such they cannot be heard to contend that their right has been infringed. In fact, in the auction notification - Annexure-A itself it has been indicated by Development Authority that it has power to cancel the auction without assigning any reasons and in the facts obtained the appellant - Development Authority has assigned the reasons as already noticed herein above which cannot be termed as perverse. In that view of the matter, we are of the considered view that order of the learned Single Judge cannot be sustained."
5. Further it was pleased to direct for refund of the entire amount paid by respective bidders including the initial deposit with interest earned. Hence, the present writ petition is also partly allowed.
6. The 1st respondent is directed to refund the total sum of *Rs.11,12,500/- along with interest and interest shall be calculated as per the rate of interest paid by the banks on fixed deposits.
Writ petition stands disposed off in the above terms.
* Corrected vide Court order dated 30.11.2017.
9The 1st respondent shall refund the amount along with interest within a period of four weeks from the date of receipt of the certified copy of this order.
Sd/-
JUDGE BL